In a move that will likely cause at least a few frowns in Beijing, Bloomberg reports that President Trump blocked a Chinese-backed buyer from acquiring chipmaker Lattice Semiconductor, not only a "personal rebuke that bodes poorly for several other Chinese buyers seeking U.S. security clearance for their acquisitions", but also a symbolic escalation of the "cold" trade war with China, hinting that the Trump administration will no longer allow China to acquire advanced US intellectual property, especially when national security may be on the line.

"Consistent with the administration’s commitment to take all actions necessary to ensure the protection of U.S. national security, the president issued an order prohibiting the acquisition," Treasury Secretary Steven Mnuchin said in a statement.

The White House said that "the national-security risks posed by the deal included the Chinese government’s role in supporting this transaction, the importance of semiconductor supply chain integrity to the United States government, and the use of Lattice products by the United States government."

Trump’s move builds on years of U.S. opposition to China’s efforts to bolster its chip industry by buying American technology. China, the world’s largest chip market, has been on the hunt for acquisitions in the field as it looks to build a domestic supply and rely less heavily on imports, as the $300 billion global semiconductor industry undergoes its biggest wave of consolidation. U.S. officials worry that China’s investment push could threaten the competitiveness of American industry and give Beijing access to cutting-edge technology with commercial and military applications.

According to Bloomberg, the deal block was just the fourth time in 27 years that a U.S. president has ordered a foreign takeover of an American firm stopped because of national-security risks.

Trump acted on the recommendation of a multi-agency panel, the White House and the Treasury Department said Wednesday. The spurned buyer, Canyon Bridge Capital Partners LLC, is a private-equity firm backed by a Chinese state-owned asset manager.

Other Chinese deals currently under review include MoneyGram International Inc.’s proposed sale to Ant Financial, the financial-services company controlled by Chinese billionaire Jack Ma. Ironically, the government is also examining an agreement by Chinese conglomerate HNA Group Co. to buy a stake in SkyBridge Capital LLC, the fund-management company founded by Anthony Scaramucci, who was briefly Trump’s White House communications director.

As Bloomberg explains, Portland, OR-based Lattice went to uncommon lengths in hopes of saving its $1.3 billion sale to Canyon Bridge, which was first announced in November. Acquisitions of U.S. companies like Lattice by overseas buyers are reviewed by the Committee on Foreign Investment in the U.S., a panel staffed by senior officials from the Treasury, State, Homeland Security and Defense departments. CFIUS can bless deals or recommend changes to address security concerns. If it doesn’t like a deal, it can recommend the president block it. Lattice and Canyon Bridge refiled three times without winning approval before making the unusual decision to appeal to Trump in hopes of winning him over with a pledge to save jobs.

The failed Lattice acquisition is at least the third Chinese deal that has collapsed this year after failing to win approval from the security panel. The others are HNA’s investment in Global Eagle Entertainment Inc., an in-flight entertainment and internet-services provider, and T.C.L. Industries Holdings’ proposed purchase of Inseego Corp.’s mobile-broadband business.

Now the question is whether China will be sufficiently angered by the decision to tacitly give North Korea the green light to lob one more ICBM in the skies over Japan...

LSCC stock moved sharply lower on the report, although it has since recovered much of its losses, as the deal collapse had been previously telegraphed, and now opens up the company for competitive bids.

China's latest supercomputer, a monolithic system with 10.65 million compute cores built entirely with Chinese microprocessors. This follows a U.S. government decision last year to deny China access to Intel's fastest microprocessors.

There is no U.S.-made system that comes close to the performance of China's new system, the Sunway TaihuLight. Its theoretical peak performance is 124.5 petaflops, according to the latest biannual release today of the world's Top500 supercomputers. It is the first system to exceed 100 petaflops. A petaflop equals one thousand trillion (one quadrillion) sustained floating-point operations per second.

The most important thing about Sunway TaihuLight may be its microprocessors. In the past, China has relied heavily on U.S. microprocessors in building its supercomputing capacity. The world's next fastest system, China's Tianhe-2, which has a peak performance of 54.9 petaflops, uses Intel Xeon processors.

China now has more supercomputers in the Top500 list than the U.S., said Dongarra. "China has 167 systems on the June 2016 Top500 list compared to 165 systems in the U.S," he said, in an email. Ten years ago, China had 10 systems on the list.

Of all the supercomputers represented on the global list, the sum of the China supercomputers performance (211 petaflops) has exceeded the performance of the supercomputers in the U.S., (173 petaflops)

If we are looking for evidence of communism in China, the first and most important place to look is at the economy. The economy in China is now decidedly capitalistic in nature. Average Chinese citizens can start their own businesses and put their income into private bank accounts. Chinese citizens can buy stocks in companies and enjoy the revenues or suffer the losses. As of just a few years ago, private property rights have been greatly enhanced in China, and Chinese people can now be more secure that their land will not be taken away from them. Let us not forget about the heavy international investment that has been permitted in China which has played a major role in fueling this developing and booming economy. As a result, there are very rich people and very poor people in China as well as an emerging middle class. Chinese citizens, who always carried a good sense for business but were restricted from entrepreneurship in the past have now been more free to take risks and build successful companies. Thus capitalism has transformed the Chinese economy and changed people’s lives forever.

Some people just can't understand that China now employs capitalist and socialist economic policies! Its ridiculous! How can people be so stupid! China has been reforming from communism for 30+ years now. So many people never change their mind, but never over something so stupid! its not like this is up for debate, 10 minitues on google will show anyone that China is no longer 100% communist.

China is, indeed, going through a transition, but it is not a transition from capitalism to communism. The evidence supports a conclusion that feudal appropriation has prevailed in both agriculture (during the commune-era) and industry (during the SRE-era) in the recent past and is now being displaced by capitalism in industry and increasingly in agriculture. In other words, China is going through a transition from feudalism to capitalism. I just don’t see calling such a transition socialism.

Maybe communism of this kind can fix merica before the circling buzzards land to pick over the festering carcass.

Thank you Lumberjack, I'm passing that list around. Normally the dems would vote against Trump but this time 13 voted to give him the war power. If they had voted as usual the bill would have passed. Maybe they didn't want bill sponsor Rand Paul to get the credit for the anti-war effort.

The word going around recently is that the reason the US wants to ban Kaspersky products is because their software is very effective in blocking or eliminating malware designed by the NSA and CIA that is intended to spy on PC users. This includes a supposed Kaspersky workaround for the hardware backdoor in Intel chips that Microsoft has refused to issue a patch for (they say it poses "no risk to the user"). Knowing how .gov operates this explaination makes too much sense for it not to be true.

Trump is on record in the past indicating he has a real problem with China's blatant theft of intellectual property from US firms so this seems to me to be very consistent with his thoughts on that subject. It has nothing to do with a "trade war" with China.

Also, has anyone else noticed that the shitty products from China have gotten even shittier in the past couple of years?? I'm to the point now where for certain items I will pay significantly more to avoid the "Made in China" label.

My office building has ventilation fans to being fresh air into the parking garage and those fans started having what I thought were bearing failures. These Greenheck brand fans, which until now I thought were purely American made, have 3/4hp motors that are Made in China.

My guy disassembled the motor to replace the bearings and called to show me that the motor shaft, not the bearing, was the problem. The metal was so soft that the area where the bearing race lands was worn out. Apparently a piss poor grade of steel or lack of hardening process.

Oh well, they're outside warranty now and I only have 17 more just like it to deal with.

Funny you should mention electric motors from China as being shit. Most of the products I've had problems with from China have been electrical related (not electronics per se). I've had two wiring harnesses made in China that were complete crap. After being used for only a couple of months both of them ended up with severely corroded copper wires WITHIN the elastomeric insulation . . . i have yet to figure out how that even could happen because in both cases the wires were not exposed to the elements. I would try to strip the insulation back to find clean copper in an effort to repair them and stopped after going over a foot both times. NEVER AGAIN.

I would suspect the copper is reacting with whatever the insulating material is made from. No telling what the chemistry of that stuff is.

It could also be the environment too. We have a room adjacent to a loading dock that had a dewatering sump and a grease trap side by side, and the fumes from that grease trap were noxious to smell, but also corroded any exposed copper in the motor control cabinet for the dewatering sump.

We finally had to relocate the MCC outside the room to solve the problem.

This is bad news for Lattice Semiconductor. Their product is pretty much a dead end technology with high cost, high power consumption, and insufficient performance advantage to really offset. Now they can't even unload their money losing operation on some hapless Chinese with too many USD's to dispose of. Glad I don't own any LSCC stock.

This is also bad news for the US tax payer... Because if the US government (ie, US military) really is reliant upon this bankrupt company for crummy chips, you can bet that the next step is to start holding out their hands for a government bail out.

Since when has a US firm ever been permitted to buy a Chinese firm? I can't think of one. But I can think of a few instances where a US firm was permitted to take on a Chinese "partner" and then ended up losing their entire investment, or having their product overtly copied, by another Chinese firm owned by their "partner".

This is why China is foolish to keep running a huge trade surplus. If you can't buy assets, then you might as well buy goods. They have all the 'reserve' currency they will ever need. In fact, they are working hard now to end the dollar dominance of international finance.

Here's a shocker. Foreigners can't buy any Chinese companies, ever. At all. So.... why should we allow them unfettered access? Reciprocity reciprocity reciprocity. Start doing to those fuckers what they do to the rest of the world and they'll wise up a lot quicker. China is a belligerent nation because we tolerate it.

The only way for a citizen of a communist country to get rich is to steal it, right? The town I live in has highly ranked schools and so has been targeted by non-English speaking Chinese nationals who buy houses with duffelbags of cash, causing runaway real estate bubble.

This isn't personal and it's not about a trade war. This is critical technology, they make mission critical programmable logic devices. We know already that Chinese products are being sold with malware burned into the firmware. If the PLA can get their fingers into critical hardware it will be a disaster.